SABIC UK - which announced 100 Teesside job losses last year - wants to cut costs and improve competitiveness in Europe
Ian Cooper
A petrochemicals company has announced plans that could boost its competitiveness and “create a more sustainable economic future” on Teesside.
SABIC UK Petrochemicals, which has operations on Teesside including the Olefins Cracker and LDPE (low density polyethylene) plant at Wilton, wants to build a large storage tank at its North Tees site for new feedstocks.
It’s hoped the development will help increase the company’s competitiveness.
Now permission for the tank, to store hydrocarbons, has been sought from Stockton Council.
Last year SABIC announced more than 100 Teesside jobs were to go as part of a restructure, due to a global drop in demand for its products.
But bosses said at the time that the company, which employs around 600 on Teesside, was “absolutely committed to making a success of the Teesside operation”.
The North Tees site houses SABIC’S major feedstock and product logistics equipment and its Aromatics complex.
SABIC, which supplies markets across Europe with materials for products from drinks bottles, car interiors and tyres to medicine, says it is too early to talk about the plans in any detail.
But a spokesperson said: “We are continuously reviewing the competitiveness of our assets worldwide including in Europe and on Teesside.
“As such, we are in the process of assessing the impact of new and alternative feedstocks on our businesses.
“It’s too early in the process to say more, but it has to do with alternative feedstocks and improving our competitiveness by becoming more efficient and lowering costs.”
They added the restructure on Teesside was also part of the plan to increase competitiveness.
“Both fall under the same umbrella,” the firm added.
Jacobs, a consultancy acting on SABIC’S behalf, said the plans will “create a more sustainable economic future for Teesside operations” and make the site more efficient.
A report to planners says: “Alternative feedstock arrangements are currently available that would improve the sustainability of the business on Teesside, and to take advantage of this opportunity, SABIC must increase their feedstock storage flexibility.”
The company has looked at alternatives, including re-use of existing “cavities” underneath Wilton and North Tees sites and the mining of a new cavity to increase storage capacity.
Both options were thought to be “unfeasible” due to high costs and technical issues.
Underground storage could also result in saline saturated waste water, which would require disposal, Jacobs’ report added.
Meanwhile SABIC bosses on Teesside have confirmed the restructuring process, announced in May, is still ongoing.
Speaking last year, SABIC UK manufacturing director Mike Ducker said several European competitors had already made jobs cuts.
“Demand for our products is shrinking and we need to find ways to reinvent ourselves,” he said.
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